Delhi District Court
The vs The on 7 July, 2008
COURT OF MS. SUJATA KOHLI
PRESIDING OFFICER LABOUR COURT II,
ROOM NO. 48, KARKARDOOMA COURTS, DELHI
I.D. No. : 373/05
Date of Institution of the case : 22/08/05
Date on which Judgment was reserved : 02/06/08
Date on which Judgment was pronounced : 07/07/08
B E T W E E N
The Workman, Sh. Shankar Dayal S/o Shri Ram Pal C/o All India Engg.
& General Mazdoor Union, E127, Karampura, New Delhi15.
A N D
The Managements, (1) Shri Hemant Rastogi, Director of M/s Tobu
Enterprises Ltd., M190, Greater Kailash, PartII, New Delhi48 (2) M/s
Tobu Kids, A24, Sohan Lal Marg, 60 Futta Road, Pul Prahlad Pur, New
Delhi41.
A W A R D
1. Direct claim was filed by the workman Sh. Shankar Dayal against the
management of M/s Tobu Enterprises and M/s Tobu Kids arraying the
Director of M/s Tobu Enterprises as respondent no. 1.
2. Workman claims that he had been working at the post of Store Man since 25/05/1977 and his last drawn salary was @ Rs. 3028/ per month and that during the course of his employment, he performed his duty honestly to the entire satisfaction of the management and he never gave any chance for complaint. However, management was not providing legal rights and facilities like payment of overtime, issuance of appointment letter, attendance card, payment of bonus, leave, wages etc. for which the workman had been making demands from time to time but management far from complying the said demands became annoyed with the workman and as a result started to look for ways and means to get rid of the workman and ultimately on 31/03/05 management closed its establishment no. 1 i.e M/s Tobu Enterprises Ltd. without giving any notice and prior information to the workman and without seeking any permission from the Labour Department. Management illegally closed the establishment from Greater Kailash.
3. Workmen went for two days for duty i.e on 01/04/05 and 02/04/05 but management refused on the ground that they had closed the establishment. In this manner, management illegally terminated the services of workman on 01/04/05.
4. It is further averred on behalf of the workman that management is also running an another unit in the name and style of M/s Tobu Kids at the same address of M190, Greater KailashII, New Delhi48, however, without officially informing the workman. Later on, it shifted the management Tobo Kids also from M190, Greater KailashII, New Delhi48 to A24, Sohan Lal Marg, 60 Foota Road, Prahlad Pur, New Delhi41.
5. Workman alleges that he went to M/s Tobu Kids at A24, Sohan Lal Marg, 60, Foota Road, Prahlad Pur, New Delhi41 but management again refused.
6. As per the workman, management adopted antilabour policy and violated provisions of section 25 F & G of I.D. Act.
7. Complaint was also filed before the Labour Department and pursuant to which labour inspector visited the management at both the addresses i.e Greater Kailash and Prahlad Pur and he gave the advise to reinstate on same post and for paying his earned wages but the management refused.
8. Workman also avers that during course of his employment, management had obtained his signatures on various blank papers and vouchers and workman complied only out of fear of loosing employment. Workman apprehends that the said documents may be misused by the management at any point of time.
9. Demand notice was sent to the management by Registered AD Post through his union on 02/04/05 to both managements No. 1 & 2 demanding reinstatement and also payment of earned wages for the month of January to March 2005 but same evoked no response from the management. Conciliation proceedings were also initiated before the Labour Department but no result could be achieved on account of adamant attitude of the management.
10. Workman claims to be unemployed inspite of his best efforts to obtain an alternative job ever since date of termination of his service.
11. Workman claims to be entitled to reinstatement with continuity of service as well as full back wages and also his earned wages for the months from January to March 2005. He has prayed accordingly.
12. Management no. 1, in their W/s, have raised several preliminary objections and mainly being that respondent/management no. 1 had been suffering continuous losses for the last 10 years and as a result of which it closed down its manufacturing activities w.e.f. 31/03/05. Due intimation of the said closure was given by management to all the effected workmen and the workman was also told that he would be paid closure compensation in accordance with law but none of the workmen approached the management for payment of the closure compensation.
13. It is further stated that since workman himself has admitted closure of the management, there is no question of reinstatement and as such claim is not maintainable.
14. As regards the dues of the workman, management pleads that Conciliation Officer/Assistant Labour Commissioner in his letter dated 10/08/05 had advised the union to make an application U/s 33C(2) I.D. Act for recovery of the dues/entitlement of closure of establishment. Workman, however, refused to accept the closure compensation as admissible U/s 25 FFF and has wrongly raised the present Industrial Dispute.
15. In the reply on merits, management has admitted the workman to be their employee, however, denying that his performance had been satisfactory. It is once again denied that management closed down its establishment illegally.
16. As regards management no. 2 M/s Tobo Kids, it has been denied that after closure of the establishment i.e Tobo Enterprises Ltd., management shifted to M/s Tobo Kids either at M190, Greater KailashII, New Delhi or at A24, Sohan Lal Marg, 60 Foota Road, Pul Prahalad Pur, New Delhi.
17. It is further stated that respondents no. 1 & 2 are independent industrial establishments and not same units of one and the same establishment. It is also clarified that none of the workmen of respondent no. 1 have been employed by the respondent no. 1 after closure of its manufacturing activities and that as on date the management has no workman at all on its rolls.
18. As regards the proceedings before conciliation officer, management pleads that the Conciliation Officer/Assistant Labour Commissioner had accepted the fact of closure of the establishment w.e.f 31/3/05 and he had advised the workman to file, if necessary, application U/s 33C (2) of the Act for recovery of the dues towards closure compensation and as per the management this advise was not called for as management had always offered and ready to pay closure compensation to the workman.
19. Allegation of obtaining signatures of the workman on blank papers stands denied as being false. Claim according to management no. 1 is not maintainable and should be dismissed.
20. As regards W/s of management no. 2 M/s Tobu Kids, it is stated that it is a proprietorship firm and has no connection with M/s Tobu Enterprises Ltd. which is a public limited company, as such, the claim against respondent no. 2 is not maintainable.
21. It is, however, conceded that Rajnish Goenka, Proprietor of M/s Tobu Kids had earlier resigned from M/s Tobu Enterprises Ltd. and Managing Director way back in the year 2002 and since his resignation from M/s Tobu Enterprises Ltd. he has severed all the connections with the said company and has nothing to do with the firm of M/s Tobu Enterprises Ltd.
22. It is denied that workman/claimant was ever employed by the management of M/s Tobu Kids. Further that since respondent no. 1 has already admitted the workman to have been its employees, present proceedings against respondent no. 2 are uncalled for and vexatious.
23. Separate rejoinder was filed to both the W/s by the workman denying the version of the management and reiterating the facts as stated in the claim as true and correct.
24. On the basis of the pleadings, following issues were framed by my Ld. Predecessor: (1) Whether management no. 1 closed down w.e.f. 31/03/05? OPM. (2) Whether there is no relationship between workman and management no. 2? OPW.
(3) Whether the services of workman have been terminated illegally and/or unjustifiably by the management?
(4) Whether workman entitled for relief of reinstatement, payment of full back wages, continuity of service and all other legal benefits?
25. During evidence, workman examined himself as WW1 on his affidavit Ex. WW1/A and besides he tendered following documents in evidence:
1. Copy of complaint lodged with Labour Department dated 05/04/05, Ex. WW1/1.
2. Copy of letter from Assistant Labour Commissioner addressed to union dated 10/08/05, Ex. WW1/2.
3. Copy of demand notice dated 02/04/05, Ex. WW1/3.
4. Copy of postal receipts, Ex. WW1/4 & 5.
5. Copy of claim filed before Labour Conciliation Officer, Ex. WW1/6.
6. Copy of challan from M/s Tobu Kids, Ex. WW1/7.
7. Copy of attendance card from management no. 1, Ex. WW1/8.
8. Statement of account of workman with respect to provident fund, Ex. WW1/9.
26. Management no. 1, on the other hand, examined Sh. Hemant Rastogi, Chief Director as MW1 on his affidavit Ex. MW1/A. Following documents were tendered in his evidence:
1. Copy of profit and loss account ending 31/03/05, MW1/1.
2. Copy of letter from the management to coworker, Ex. MW1/2.
3. Copy of letter from management to labour department, Ex. MW1/3.
4. Copy of particulars of appointment of Directors and Managers, Ex. MW1/4.
27. Management no. 2 did not lead any evidence.
28. Arguments were heard. File perused. I proceed to decide the claim on the basis of material on record, in the light of arguments addressed on behalf of both parties. My findings on each issue are as under: ISSUE No. 1 (Closure)
29. The factum of closure of management no. 1 has not been disputed by the workman himself and as such a fact admitted needs no further proof even though management has of its own accord tendered various documents regarding closure of the said establishment. Since workman has not denied the closure, the same is already proved. Issue no. 1 is accordingly decided in favour of management no. 1 and against the workman. ISSUE No. 2
30. As regards relationship of employeremployee between workman and management no. 2, the burden to prove the same rested upon the workman. Out of the documents tendered in evidence by him only Ex. WW1/7 relates to the said management no. 2. However, this is a copy of a challan showing consignment of goods by M/s Tobu Kids. However, same is not in any manner showing as to how it connects the workman to M/s Tobu Kids in any way and for that matter, it ws not even shown that M/s Tobu Kids is connected to M/s Tobu Enterprises Ltd. in any manner whatsoever. Apart from this there is not even a single document pertaining to M/s Tobu Kids and as such as far as documentary evidence is concerned, workman has failed to establish any relationship of employeremployee with M/s Tobu Kids. In fact, even otherwise, what he has pleaded is that he should have been absorbed in M/s Tobo Kids which was only part of M/s Tobo Enterprises Ltd. But then as already above stated workman has failed to establish that M/s Tobu Kids was in any way connected with or was having anything to do with M/s Tobu Enterprises Ltd.
31. It has not been the case of the workman that he was employed with M/s Tobu Kids or that he was being made to work for M/s Tobu Kids also. It is only his plea that he should have been absorbed in Tobu Kids after closure of M/s Tobu Enterprises. Since workman has fialed to establish any relationship between respondent no. 1 & 2, it cannot be said that both respondents were units of one and the same industrial establishment.
32. In fact, it is relevant that workman did not even send any demand notice to management no. 2 M/s Tobu Kids and as such also claim as against M/s Tobu Kids would not be maintainable. Management no. 2 did not lead any evidence but workman was cross examined by Ld. AR for management no. 2 M/s Tobu Kids separately. The relevant portions of his cross examination are being reproduced hereunder: "It is wrong to suggest that I never worked with M/s Tobu Kids. It is wrong to suggest that on 31/03/2005 I was employed with Tobu Enterprises. I used to get my wages from Tobu Enterprises. I do not have any documentary proof regarding allegation made by me in para 4 of my affidavit. It is wrong to suggest that management no. 1 was closed on 01/04/2005. It is wrong to suggest that I have no claim against management no. 2. It is wrong to suggest that I was never employed by management no. 2. It is wrong to suggest that my affidavit is false and I am deposing falsely".
Cross examination of workman by Ld. AR for management no. 1 would further bring out the factual situation more clearly. Relevant portions of his cross examination are being reproduced hereunder: "I demanded the legal facilities on 01/04/2005 after I was terminated from services. The work of Tobu Enterprise was going in the name of Tobu Kids. I do not have any documentary proof to show that Tobu Enterprise and Tobu Kids are same firm. It is wrong to suggest that Tobu Kids has nothing to do with the address of Tobu Enterprise. The address of Tobu Enterprise given in para 4 of my claim is correct. I do not know the name of the Labour Inspector also the date of visit. I was made to sign on blank papers on long (time) back. I do not recollect the name of the official who got my signatures on blank papers. I did not make any complaint to any authority to this effect. It is correct that Ex. WW1/8 bears the name of management no. 1 and has been filed by me.... It is wrong to suggest that my affidavit is false and I am deposing falsely".
33. In view of the above evidence of the workman, it is clear that he has failed to establish that he was an employee of management no. 2 Tobu Kids but also the fact that management no. 2 had any connection with management no. 1. Issue no. 2 is also accordingly decided against the workman and in favour of the management no. 2. ISSUE No. 3
34. Relevant provision i.e section 25FFF I.D. Act is being reproduced hereunder: "Compensation to workmen in case of closing down of undertaking: (1) Where an undertaking is closed down for any reason whatsoever, every workman who has been in continuous service for not less than one year in that undertaking immediately before such closure shall, subject to the provisions of subsection (2), be entitled to notice and compensation in accordance with the provisions of section 25F, as if the workman had been retrenched:
Provided that where the undertaking is closed down on account of unavoidable circumstances beyond the control of the employer, the compensation to be paid to the workman under clause (b) of section 25F, shall not exceed his average pay for three months.
[Explanation - An undertaking which is closed down by reason merely of
(i) financial difficulties (including financial losses); or
(ii) accumulation of undisposed stocks;
or
(iii) the expiry of the period of the lease
or licence granted to it; or
(iv) in case where the undertaking is
engaged in mining operations, exhaustion of the minerals in the area in which operations are carried on, Shall not be deemed to be closed down on account of unavoidable circumstances beyond the control of the employer within the meaning of the proviso to this sub section].
35. Section 25G I.D. Act lays down as under:
Section 25G. Procedure for retrenchment Where any workman in an industrial establishment, who is a citizen of India, is to be retrenched and he belongs to a particular category of workmen in that establishment, in the absence of any agreement between the employer and the workman in this behalf, the employer shall ordinarily retrench the workman who was the last person to be employed in that category, unless for reasons to be recorded the employer retrenches any other workman.
36. Section 25H I.D. Act lays down as under:
Section 25H. Reemployment of retrenched workmen Where any workmen are retrenched, and the employer proposes to take into his employ any persons, he shall, in such manner as may be prescribed, give an opportunity [to the retrenched workmen who are citizens of India to offer themselves for reemployment, and such retrenched workmen] who offer themselves for reemployment shall have preference over other persons.
37. As regards compliance of section 25FFA which provides for 60 days' notice to be given of intention of close down any undertaking, However, it makes an exception by the proviso that this requirement shall not apply to an undertaking (1) in which less than 50 workmen are employed (2) less than 50 workmen were employed on an average per working day in the preceding twelve months.
(b) an undertaking set up for the construction of buildings, brides, roads, canals, dams or for other construction work or project. The provisions is being reproduced hereunder: "25FFA. Sixty day's notice to be given of intention to close down any undertaking -
(1) An employer who intends to close down an undertaking shall serve, at least sixty days before the date on which the intended closure is to become effective, a notice, in the prescribed manner, on the appropriate Government stating clearly the reasons for the intended closure of the undertaking:
Provided that nothing in this section shall apply to
(a) an undertaking in which
(i) less than fifty workmen are employed, or
(ii) less than fifty workmen were employed on an average per working days in the preceding twelve months,
(b) an undertaking set up for the construction of buildings, bridges, roads, canals, dams or for other construction work or project.
38. In the present case, it is not the plea of the workman that management was employing 50 or more workmen at any given time. The claim is silent in this aspect. On the other hand, there is a letter from the management to the Labour Department which is Ex. MW1/3 stating therein that the number of workmen in the management is 10. During cross examination of MW1, suggestion had been put to the witness on behalf of workman that he had not sent any letter to the workman as well as to the labour department regarding closure of the company. It was admitted by the witness that postal receipts of the letter were not in the court record. As such, the receipt of letter Ex. MW1/3 would have remained unproved, had it not been for letter dated 10/08/05 from the Assistant Labour Commissioner addressed to the union wherein it has been admitted by the Assistant Labour Commissioner that letter had been received from the management no. 1 to the effect that they have had to close down the manufacturing activities on account of losses. This letter has been tendered in evidence by the workman himself as Ex. WW1/2. Being a document of workman, relied upon by the workman himself, the intimation by management no. 1 to the labour department regarding closure stands proved.
39. Compliance of section 25FFA I.D. Act would have become necessary only if it was established by the workman that management had employed 50 or more workmen at an average per working day in the preceding 12 months. Far from being established, this fact has not been even pleaded by the workman and as such the compliance of section 25FFA I.D. Act would not necessary for the management no. 1.
40. Even during cross examination of management witness no. 1, no suggestion to this effect has been put to the witness that the management was employing 50 or more workers in the preceding year on an average working day. As such, it is inferred that management was having only 10 workers in the year preceding its closure on an average working day as has been intimated by them to the Assistant Labour Commissioner vide their letter Ex. MW1/3, which letter has been admitted already vide Ex. WW1/2.
41. This being the factual position, there was no requirement for compliance of section 25FFA i.e sixty days notice by the management no. 1.
42. As regards provisions of section 25FFF I.D. Act is concerned, payment of compensation and payment of wages for the notice period have not been made conditions precedent to retrenchment on closure under section 25FFF. However, the liability of the employer to make payments remains, which may be enforced; held in - Pramod Kumar Tiwari Vs. Hindustan Fertilizer Corporation Ltd., 1994 LLR 465 (MP) (DB).
43. On the same ground as above, the provision of Chapter 5B particularly section 25(o) which lays down the procedure for closing down an undertaking shall not be applicable to management no. 1. Since the provisions of Chapter 5 would only apply only to an establishment having not less than 100 workmen employed on an average per working day in the preceding 12 months.
44. Keeping this in view, the cross examination of the management witness no. 1 is being reproduced hereunder: "In the year 2000, there were about 6070 workers were working with the management and in the year 2001 there were 4050 and in the year 2002 management had only 15 workers as most of them have settled their dues. I intimated the workman regarding closure of company by sending him a letter dated 31/03/2005 Ex. MW1/3. I also intimated to the Labour Secretary Government of Delhi regarding the same. It is wrong to suggest that I did not send any letter to the workman as well as to the labour department regarding closure of company.
It is correct that postal receipts of the letters are not in the court record. It is correct that management did not intimate regarding closure of company to the Registrar of Company. Vol. As same was not required. The Sale Tax Registration has been surrendered to the sale tax department however the same is not on court record. I cannot produce the sale tax surrender certificate before the Court as same is not provided to us. It is correct that I did not intimate the Sale Tax Department regarding closure of company as same was not required. We have also intimated to the ESI department regarding the closure of company. It is correct that I did not obtain any closure certificate from the ESI. It is wrong to suggest that management did not intimate to the ESI department regarding closure of the company. It is wrong to suggest that management is running M/s Tobu Kids at A24, Sohan Lal Marg, 60 Foota Road, Prahalad Pur, New Delhi. It is wrong to suggest that management did not pay earned wages to the workman from January, 2005 to March, 2005. At present we are not paying the income tax on behalf of M/s Tobu Enterprises. It is wrong to suggest that management has not been closed down. It is wrong to suggest that workman has not been paid closure compensation. It is wrong to suggest that services of the workman have been terminated by the management. It is wrong to suggest that closure of the management is artificial to deprive the workman from his legal rights. It is wrong to suggest that documents filed by me are forged and fabricated. At present I am doing business of liasoning in my personal name. It is wrong to suggest that my affidavit is false or I am deposing falsely".
45. The suggestion on behalf of workman to the effect that management has not been closed down is self contradictory to the claim filed by the workman himself wherein he himself has disclosed that management has closed down the undertaking.
46. In view of the ratio laid down in Pramod Kumar Tiwari Vs. Hindustan Fertilizer Corporation Ltd., since payment of compensation and wages for the notice period have not been made conditions precedent to retrenchment on closure U/s 25FFF, the retrenchment of the workman would not be rendered illegal just because the compensation and wages may not have been paid. This is irrespective of the fact that liability of the employer to make the payment would remain and which may be enforced, as such, workman would remain at liberty to enforce the payment of such dues by way of the appropriate remedy U/s 33C (2) I.D. Act, there would be no industrial dispute in existence as such.
47. As such, it is held that termination of the workman is not rendered invalid merely because compensation upon closure has not been paid to him although some liability of the management no. 1 remains towards the workman. Issue no. 3 is also decided in favour of the management no. 1 and against the workman.
48. Regarding the justifiability behind the termination of service of workman, it has been held that Industrial Tribunal has no power to enquire into the motive of closure in order to find out whether the closure is justified or not. It can only consider the question of bonafide and nothing more as in Savani Transport Pvt. Ltd. Vs. Savani Transport Employees Association; 1994 LLR 578 (Ker.).
ISSUE No. 4
49. Since plea of closure of management no. 1 is undisputed in this case , there is no question of reinstatement or payment of full wages and continuity of service as prayed for in clause 4 of the prayer para. The workman can be paid only his dues as in terms of section 25FFF I.D. Act and besides he would also be entitled for reemployment in case the employer management no. 1 proposes to take into its employment any such persons. The employer management no. 1 in such case, in such manner, given an opportunity to the retrenched workman to offer himself for reemployment and the said workman shall be having preference over other persons applying for the employment. Issue no. 4 is also accordingly decided against the workman and in favour of the management.
RELIEF
50. As already stated above, there is no question of reinstatement or back wages but the only remedy of the workman lies under 33C (2) I.D. Act for enforcement of payment of retrenchment compensation and to apply for reemployment with the management no. 1 in case management no. 1 employs more persons.
51. As regards management no. 2, claim fails, as workman failed to establish that he was at any point of time an employee of management no. 2 or the fact that management no. 2 was a part of management no. 1. The claim filed as an I.D against both managements stands dismissed, however, with liberty to the claimant/workman to approach the Court U/s 33C (2) I.D. Act for his dues. Reference is answered accordingly. Award is passed. Copy of the award be sent to appropriate government for publication within 30 days from the receipt of the award. File be cosigned to record room.
Announced in the open court Today on 07/07/2008 (SUJATA KOHLI) Additional District & Sessions Judge/ Presiding Officer Labour CourtII, Karkardooma Courts, Delhi.